Saudi Arabia has loaded no crude for export via the Bab Al Mandeb strait from its west coast since the Houthis declared a maritime embargo on Saudi shipping.
Crude oil supply to Asian buyers is instead moving through the Suez Canal, where exports rose 106 per cent for the week of the embargo announcement to 1.06 million barrels per day, up from the week starting July 13, according to Kpler data.
Tankers carrying cargoes loaded before the embargo, mostly Chinese-operated, have continued to transit the strait. They include the Singapore-flagged Xin Long Yang and Chinese-flagged Cosnew Lake, both managed by China’s Cosco Shipping, which passed through on July 23. Unconfirmed reports suggest some tankers are leaving the strait with their AIS transponders switched off.
On Saturday, the Iran-backed Houthi rebels claimed to have struck Saudi Aramco's oil facilities in Jizan and Yanbu. Neither the Saudi Arabian government nor Aramco, the world's biggest oil exporting company, have confirmed the Houthi claim, but if confirmed, it will be the first direct attack on the kingdom's oil infrastructure since 2022, and is expected to expedite the shift.
The Suez route, however, is an expensive, time-consuming workaround. A Saudi oil cargo from Yanbu on the Red Sea to South Korea takes about 24 days via Bab Al Mandeb, versus 54 days via Suez and around the Cape of Good Hope, according to Kpler.
That's more than four weeks longer, with the exact difference varying by destination among Asian buyers, which include China, India and Japan.
Saudi Aramco, the state oil producer, sells most of its crude under fixed monthly term contracts at a set official price, with only a small share sold on a spot basis. Asian buyers are its biggest customers, so crude oil loaded at Yanbu typically heads east via the shortest route, which is Bab Al Mandeb.
The Suez route runs in the opposite direction, with cargo sailing into the Mediterranean. This option also forces a change of ship, as the man-made canal is too shallow for fully loaded very large crude carriers, which typically carry about two million barrels.
Only smaller Suezmax tankers, carrying about one million barrels each, can transit fully laden. This means it takes two Suezmaxes to move what one VLCC would carry through Bab Al Mandeb.
What happened
The Houthis claimed to have fired missiles and drones at Saudi Arabia's Aramco facilities in Jizan and Yanbu on Saturday.
Jizan's refinery processes 400,000 bpd, output that can be replaced from stockpiles. Yanbu’s export terminal handled 92 per cent of Saudi Arabia's seaborne crude exports in June, according to Kpler.
It sits at the end of the East-West Pipeline, which carries crude overland from the Gulf coast to the Red Sea, bypassing the Strait of Hormuz. Saudi Arabia pushed the pipeline to a record seven million bpd in March after Iran blockaded Hormuz.
Mannat Jaspal, director and fellow of climate and energy at the Observer Research Foundation Middle East, said Saudi Arabia’s East-West Pipeline to Yanbu on the Red Sea has been a crucial safeguard for global energy supplies, enabling crude exports to avoid the Strait of Hormuz and maintain flows to Asia through the Bab Al Mandeb and to Europe via the Suez Canal. “A double chokepoint scenario will send energy markets into a severe tailspin,” she added.
A July 27 statement from the 47-member Combined Maritime Forces noted that the Houthis “have moved from posturing to active targeting” of Saudi-affiliated vessels and those linked to the kingdom's interests. It noted that the group has now deployed missiles and drones to positions near Bab Al Mandeb.
Historical precedent
The Houthis have wreaked havoc on oil flow and container shipping in the past. Bab Al Mandeb carried an average of 9.3 million bpd in 2023, before the Houthis' campaign in the Red Sea at the start of the Gaza war cut that to about 4.2 million bpd in the first half of 2025, according to the US Energy Information Administration.
Flows only climbed back to about 7.4 million bpd in June, according to Kpler, after Saudi Arabia rerouted crude to its Red Sea terminals.
During the 2023-25 attacks on commercial shipping, the Houthis fired on more than 100 vessels in the Red Sea, sinking four ships and killing at least nine sailors. It forced more than 2,000 ships on to the Cape of Good Hope route.
Major container lines including Maersk and Hapag-Lloyd suspended Red Sea transits and the Suez Canal lost about $6 billion in revenue in 2024. A truce between Saudi Arabia and the Houthis held from April 2022 but began unravelling this month.
The Houthis are engaged in a “tit-for-tat” confrontation with Saudi Arabia, choosing to escalate gradually rather than seeking a full-scale war, Aziz Alghashian, senior non-resident fellow at the Gulf International Forum, said. “This war has been imposed upon us,” he added.
Abqaiq and Khurais
Saturday's strikes are smaller in scale than the September 2019 attack on Aramco's Abqaiq and Khurais facilities, also claimed by the Houthis, though US officials blamed Iran. That attack knocked out 5.7 million bpd, or over half of Saudi Arabia's output.
It was the largest single disruption in oil market history at the time. Brent jumped as much as 19.5 per cent intraday when markets reopened, the biggest one-day percentage gain since the 1991 Gulf War. Aramco restored production within weeks.
Brent broke back above $100 a barrel on July 23 for the first time in two months, then fell nearly 5 per cent to settle near $97 on Friday as hopes of US-Iran de-escalation grew. Monday's open, the first session since Saturday's strikes, will show how sharply markets react to the latest Saudi oil supply disruption.
